Cotton Acres Bloomed, Price Shriveled
This past Monday (June 30), USDA released their annual Acreage report. The report is preceded by the March Prospective Plantings report with the difference being a more solid, confirmed acreage number in the acreage report compared to an expected, planned number in the earlier Prospective Plantings report.
For cotton, total U.S. acres are called at 11.369 million. This is 268,000 more than was projected in March and 962,000 more than was planted in 2013. Mississippi cotton acres were called at 400,000, up 20,000 from the March estimate and 110,000 compared to last year. Across the U.S. all states with cotton acreage were higher than the expected number reported in March, excluding Arizona, Missouri, New Mexico, and Tennessee (down 5,000, 10,000, 5,000 and 30,000, respectively). Soybeans most likely replaced the acres in the Missouri and Tennessee, while drought conditions were the likely culprit in the southwestern states.
Using the most recent estimate of per acre yield, the extra 268,000 acres would lead to roughly 460,000 more bales from the U.S. As a result, the market was under pressure on Monday following the report and then slid lower for the remainder of the week. Thursday’s rice dipped about 5 cents per pound for the December futures contract compared to Friday’s close.
For commentary on soybeans, corn and wheat check out Dr. Brian William’s commentary HERE.